Law and regulation

Audit / FRC plans £1m additional funds to monitor audit firms, says McLaren

Harsher penalties for poor audit work and tougher monitoring by the Financial Reporting Council (FRC) is necessary given the current lack of confidence in the audit profession. Philip Smith talks to Melanie McLaren, FRC executive director of audit, about the tougher approach

Audit / FRC threatens £10m fines for poor audit work

The Financial Reporting Council (FRC) will implement the recommendations of the independent review of sanctions undertaken last year, which include introducing a fine of £10m or more for seriously poor work by a Big Four firm and greater use of non-financial penalties, as well as the possibility of ten-year bans for individuals

Audit / FRC refutes claims of ‘internal cultural problems’

The Financial Reporting Council (FRC) has taken the unusual step of responding directly to comments made by the Local Authority Pension Fund Forum (LAPFF) in response to the recent corporate governance code consultation, which the regulator says contain ‘a number of inaccuracies and errors’ about its own governance and culture

Audit / Audit materiality, judgments and adjusted errors

Katherine Bagshaw FCA examines the Financial Reporting Council's (FRC) latest audit quality thematic review of materiality and talks to key stakeholders about their views on judgment issues from adjusted errors to performance materiality and profit adjustments, and the UK regulatory requirement to assess materiality

Audit / SEC penalises KPMG, Deloitte and BDO over unregistered auditors

The US Securities and Exchange Commission (SEC) has charged foreign affiliates of KPMG, Deloitte & Touche, and BDO for their involvement in audit work that circumvented the full oversight of the Public Company Accounting Oversight Board (PCAOB), by using unregistered auditors

Audit / Deloitte pays £109m to settle claims over audit failures

Deloitte has agreed to pay the US justice department $149.5m (£109m) to settle claims arising from its audits of failed mortgage lender Taylor, Bean & Whitaker Mortgage (TBW), which collapsed and declared bankruptcy in 2009 and was subsequently found to have been involved in a large scale fraud

Audit / Limited impact of mandatory rotation on audit quality

US and EU mandates regarding auditor rotation are failing to eliminate the ill effect of long auditor tenures with corporate clients, according to research published by the American Accounting Association

Audit / Auditors failing to alert regulator to ‘red flags’ at charities

Auditors are failing to report matters of material significance to the Charity Commission, with analysis showing under a quarter are doing this and most are not meeting the required timescale, despite high profile instances of charity collapse

Audit / FRC fines ex-Tenon firm and partner over Quindell audit

The Financial Reporting Council (FRC) has fined and reprimanded the audit firm Arrandco Audit Ltd, formerly RSM Tenon Audit Ltd (Tenon) and the audit engagement partner Jeremy Filley after both parties admitted misconduct in relation to the audit of the financial statements of Quindell Portfolio plc and Quindell Ltd

Audit / Woolf: it’s not about the money

The Financial reporting Council (FRC) needs to explore the potential impact of non-financial sanctions, such as reputational damage, for firms at fault for audit failures, argues Emile Woolf

Audit / Monitoring Group considers single board for ethics and assurance standards

A roundtable discussion held by The Monitoring Group of its proposed overhaul of the global audit standard setting process revealed broad support for a potential restructure

Audit / Morris: rotation exposes auditors to increased risk of claims

Mandatory tendering and rotation in audits could leave auditors increasingly open to claims against them, up to and including negligence, says partner at law firm RPC Rob Morris

Audit / Corporate Governance Code overhaul chance to strengthen internal audit role

Dr Ian Peters, chief executive of the Chartered Institute of Internal Auditors, explains why internal audit is being given a critical role in the Financial Reporting Council’s (FRC) review of the Corporate Governance Code

Audit / Hike in audit thresholds for community benefit societies

Audit thresholds for co-operatives and community benefit societies will double from April 2018 in a bid to reduce red tape for the smallest organisations

Audit / Multimillion pound fines could reduce competition in audit market

Accountancy firms and institutes have raised concerns that if the Financial Reporting Council (FRC) continues to impose growing fines for audit misconduct it could result in a lack of competition, as firms may leave or avoid the listed markets due to a higher level of risk, reports Amy Austin